Visa became the first significant payment services company to incorporate a dollar-pegged cryptocurrency into its legacy networks. It revealed that users would be able to settle transactions in Ethereum-based stablecoin USDC.
PayPal's president and CEO announced on Tuesday that the company would begin embracing cryptocurrency as a medium of exchange at its millions of global merchants, ahead of a formal announcement.
Major Signals
- Visa set to begin accepting USDC stablecoin for transactions.
- Paypal starts accepting bitcoin and four other cryptocurrencies for payments.
- Both Visa and PayPal imply plans of launching other cryptocurrencies soon.
Visa, the world's largest payments company, has revealed that it will now settle payments in the USDC stablecoin on the Ethereum blockchain, making it the first major payments network to do so.
Visa piloted the USDC payment option via cryptocurrency exchange Crypto.com, which would now be able to handle its crypto debit card company entirely in digital assets, according to Business Insider. Visa's conventional settlement procedure allowed the company to settle in fiat currency, which increased costs and complexity.
Crypto.com will now be able to settle transactions directly in USDC, eliminating the need to convert to fiat currency. Visa's decision to embrace digital currencies explicitly helps it to enjoy the full benefits of these currencies. Crypto bank Anchorage serves as the settlement agent for USDC transactions, which means Crypto.com sends USDC to Visa's Ethereum address in Anchorage.
Visa could settle payments in central bank digital currencies in the future (CBDCs). Visa's CEO, Alfred Kelly, has hinted that the business could expand beyond stablecoins to include bitcoin and other crypto assets in the future.
PayPal enables crypto payments
On March 30, news of PayPal's alleged decision to accept cryptocurrencies broke. Dan Schulman, the firm's CEO, confirmed to Reuters later in the day that the reports were accurate and that an official statement will be issued soon.
The new system is expected to provide a crypto checkout service that allows users to use their stored coins to pay for products and services at licensed vendors. According to reports, after coins are subjected to a fast transfer at the time of sale, merchants can obtain equivalent funds directly in fiat currency.
At launch, the checkout service is expected to support all four of PayPal's licensed cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH).
There are no transaction costs for consumers who pay with cryptocurrencies, and only one coin can be used per transaction. This news has already impacted the market, as bitcoin and ethereum rallied after the announcement.
Let us know what you think about this news in the comments.
